1965 (12) TMI 135 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of the search and seizure under Rule 126 L (2) of the Defence of India (Amendment) Rules 1963.
2. Validity of the seizure orders under Section 110(3) of the Customs Act, 1962.
3. Authority of the Collector of Customs to seize documents.
4. Relevance and usefulness of the seized documents to the proceedings under the Customs Act.
5. Validity of the authorisation for search under Section 105 of the Customs Act.

Detailed Analysis:

1. Legality of the Search and Seizure under Rule 126 L (2) of the Defence of India (Amendment) Rules 1963:
The appellants argued that the order of search and seizure dated August 19, 1963, was illegal because the Excise authorities had no power to seize documents under Rule 126 L (2). This rule only authorizes the seizure of gold suspected to be in contravention of the Gold Control Rules, along with its package, covering, or receptacle. The respondents contended that Rule 156 provided additional powers for securing compliance with the Gold Control Rules, which included the seizure of documents. However, the court held that Rule 156 grants ancillary or incidental powers for making effective seizure of suspected gold and does not include the independent power to seize documents. The court noted that Rule 126 L (2) was not amended to include the seizure of documents, unlike Rule 126 L (1), which explicitly included such a provision after the Seventh Amendment. Therefore, the court concluded that respondent no. 1 had no authority under Rule 126 L (2) to order the seizure of documents.

2. Validity of the Seizure Orders under Section 110(3) of the Customs Act, 1962:
Despite the illegality of the initial search and seizure under Rule 126 L (2), the court found that there was a valid order of seizure dated September 11, 1963, by the Collector of Customs under Section 110(3) of the Customs Act. This section allows the proper officer to seize any documents or things useful for or relevant to any proceeding under the Act. The court rejected the appellant's contention that the Collector of Customs was not a "proper officer" and held that the Collector, by virtue of his position, was indeed a proper officer under Section 110(3).

3. Authority of the Collector of Customs to Seize Documents:
The appellants argued that the Collector of Customs had no authority to seize documents from the possession of the Superintendent or the Assistant Collector, Central Excise. The court rejected this argument, stating that the Collector of Customs, having assigned the powers of a "proper officer" to the subordinate officer, must himself be deemed to have the powers of a "proper officer" under Section 110(3) of the Customs Act. The court also clarified that the power of seizure does not necessarily involve physical possession but can include legal possession, which was still with respondent no. 2 despite the documents being sent to Delhi for translation.

4. Relevance and Usefulness of the Seized Documents to the Proceedings under the Customs Act:
The appellants contended that there was no material to show that the documents seized were relevant or useful to the proceedings under the Customs Act. The court rejected this argument, citing the orders of the Collector dated September 6, 1963, and September 11, 1963, which stated that the documents were useful for and relevant to the proceedings under the Customs Act. The court also referred to the affidavit of respondent no. 2, which detailed the information received about the appellant's undeclared gold and other contraventions of customs and foreign exchange regulations.

5. Validity of the Authorisation for Search under Section 105 of the Customs Act:
In Civil Appeal No. 677 of 1965, the appellant challenged the validity of the authorisation for search under Section 105 of the Customs Act, arguing that there was no averment that the documents were "secreted." The court interpreted the term "secreted" in the context of the section to mean documents kept out of the normal or usual place with a view to conceal them. The court held that the power of search under Section 105 is a general power and does not require the specification of a particular document. The court found that the preliminary conditions required by the section were satisfied in this case and upheld the validity of the authorisation.

Conclusion:
The Supreme Court dismissed both appeals, holding that the appellants had not made out a case for the grant of a writ. The court upheld the validity of the seizure orders under Section 110(3) of the Customs Act and the authorisation for search under Section 105 of the Customs Act, while noting the illegality of the initial search and seizure under Rule 126 L (2) of the Defence of India (Amendment) Rules 1963. The appeals were dismissed with costs.